Early Friday morning, Tesla CEO Elon Musk rolled out his next innovation: a collection of home and business batteries that he claims are a step toward freeing the world from the energy grid.
It will take years to see whether that projection will play out. In the meantime, there's a more fundamental question.
Would you buy a home battery from Tesla?
There have been home batteries for years, but they've been relatively useless to the vast majority of home owners and business operators. After all, most people are connected to the grid, and even when there are brownouts, utilities can get power back fairly quickly.
Now, Musk is going to brand his home batteries with the Tesla name. It will be a test of two ideas:
1) Is the Tesla mystique transportable from cars to other products?
Find out why a growing number of Americans are giving up their cars for good.
2) Is a brand name enough to get people to consider a backup power system?
There's a lot riding on the answers to those questions, not least of which the future of Tesla's gigafactory plant outside Reno, Nevada.
Initially, the Tesla batteries will be built at its factory in Fremont, California, but then Tesla will produce them at the it gigafactory once it opens in 2016.
It needs the Powerwall, the home battery that will be front and center, and the other variations to sell in big quantities to meet Tesla's aggressive 2020 production goals for the gigafactory.
Lux Research, which has paid close attention to everything Tesla does, says the Powerwall needs to demonstrate that it is a breakthrough.
“Cheap cells made in the Gigafactory are only part of the puzzle,” Dean Frankel of Lux Research, said in a news release
He said there's a difference between the lithium-ion batteries used in electric vehicles like the Tesla Model S, and the home versions that Tesla plans to sell.
These stationery batteries have "more of a relative cost contribution coming from power electronics, software, and installation. Without more vertical integration – and perhaps even some acquisitions and Gigafactory-like efforts dedicated to inverters – Tesla is limiting its growth potential here," Frankel said.
So, watch for plenty of efforts by Tesla to find partners beyond Panasonic, its gigafactory ally, and major customers for the technology.
No matter what happens, we've seen the latest demonstration of Musk's ambition, and certainly he's enthusiastic about the opportunity for the battery business.
Said Musk: "Our goal here is to fundamentally change the way the world uses energy." Or as Daniel Burnham was famous for saying, make no little plans.
